PAPPU AND ORS.versusVINOD KUMAR LAMBA AND ANR.

                        [2018] 1 S.C.R. 195                               195


                         PAPPU AND ORS.                                   A
                                  v.
              VINOD KUMAR LAMBA AND ANR.
                  (Civil Appeal No. 20962 of 2017)
                      JANUARY 19, 2018                                    B
        [DIPAK MISRA, CJI, A. M. KHANWILKAR
            AND DR. D. Y. CHANDRACHUD, JJ.]
      Motor Vehicles Act, 1988:
       s. 149(2)(a)(ii) – Motor vehicle accident – Liability of the
                                                                          C
insurance company – Onus to prove that offending vehicle was
driven by unauthorized person – On whom – On facts, offending
truck driven rashly and negligently, resulting in death of victim –
Courts below absolved the Insurance company from its liability in
respect of truck since the same was not driven by a person having
a valid licence – On appeal, held: Insurance Company is entitled to       D
take a defence that the offending vehicle was driven by an
unauthorised person or the person driving the vehicle did not have
a valid driving licence – Onus would shift on the Insurance Company
only after the owner of the offending vehicle pleads and proves the
basic facts within his knowledge that the driver of the offending
                                                                          E
vehicle was authorised by him to drive the vehicle and had a valid
driving licence at the relevant time – On facts, owner of the offending
vehicle did not produce any evidence except a driving licence of
one driver, without any specific stand taken in the pleadings or in
the evidence that the same driver was, in fact, authorised to drive
the vehicle in question at the relevant time – Insurance Company          F
plainly refuted the plea and also asserted that the offending vehicle
was not driven by an authorised person having valid driving licence
– Merely producing a valid insurance certificate in respect of the
offending truck was not enough for the owner to make the Insurance
Company liable to discharge his liability arising from rash and
                                                                          G
negligent driving by the driver of his vehicle – Thus, tribunal rightly
absolved the Insurance Company from any liability for just reasons
as affirmed by High Court.
     Motor vehicle accident – Liability of the insurance company,
when absolved – Owner of the vehicle produced the insurance
                                                                          H
                                195
196            SUPREME COURT REPORTS                           [2018] 1 S.C.R.


A     certificate indicating that vehicle was comprehensively insured by
      the Insurance Company for unlimited liability – Held: Even if the
      insurer succeeds in establishing its defence, the tribunal or the Court
      can direct the insurance company to pay the award amount to the
      claimant and, in turn, recover the same from the owner of the vehicle
      – To sub serve the ends of justice, the insurer to pay the claim amount
B
      awarded by tribunal as confirmed by the High Court to the claimants
      in the first instance, with liberty to recover the same from the owner
      of the vehicle in accordance with law.
            National Insurance Co. Ltd. v. Swarn Singh and Ors.
            [2004] 1 SCR 180 : (2004) 3 SCC 297 – relied on.
C
                               Case Law Reference
            [2004] 1 SCR 180                     relied on        Para 15
            CIVIL APPELLATE JURISDICTION: Civil Appeal No. 20962
      of 2017.
D
             From the Judgment and Order dated 09.10.2014 of the High Court
      of Judicature at Allahabad in First Appeal from Order No. 1138 of 2000.
            Sharve Singh, Sanjai Singh, Rajeev Singh, Advs. for the Appellants.
            Rishi Malhotra, Adv. for the Respondents.
E           The Judgment of the Court was delivered by
             A. M. KHANWILKAR, J. 1. This appeal questions the legality
      and tenability of the judgment of the High Court of Judicature at Allahabad
      in First Appeal from Order No.1138 of 2000, dated 9th October, 2014,
      whereby the appeal filed by the appellants was dismissed by the High
F     Court whilst rejecting the only question raised before it regarding
      absolving the Insurance Company (Respondent No.2) from any liability
      in respect of truck bearing No.DIL-5955, which was duly insured by
      respondent No.2 Insurance Company, on the ground that the same was
      not driven by a person having a valid licence, as found by the Motor
G     Accident Claims Tribunal, District Allahabad in Claim Petition No.215
      of 1999.
            2. In the claim petition it was asserted that on 12.08.1995 Om
      Prakash, son of Satku Lal, was driving Truck No.URS-2735 when it
      was knocked down by a rashly and negligently driven Truck No.DIL-
H
                PAPPU v. VINOD KUMAR LAMBA                                      197
                    [A. M. KHANWILKAR, J.]

5955 coming from the opposite direction, as a result of which Om Prakash        A
succumbed to fatal injuries. The claim petition was filed by the widow of
deceased Om Prakash. Om Prakash left behind his children Pappu, aged
16 years, Ramu, 12 years, Kumari Geeta, 14 years, Kumari Neetu, 10
years, Kumari Guriya, 8 years and his mother, Smt. Shiv Rani, at the
time of the accident. The widow of deceased Om Prakash claimed
                                                                                B
compensation of Rs.7 lakh under Fault Liability and Rs.25,000/- under
No Fault Liability. The mother of Om Prakash claimed compensation of
Rs.50,000/- separately. On the date of the accident, Om Prakash was
around 35 years of age and was a driver by profession.
        3. In the context of the sole contention raised before the High
Court and reiterated before this Court, it is not necessary for us to dilate    C
on factual aspects considered by the Tribunal except to state that the
Tribunal, on analysis of the evidence on record, held that Om Prakash
died because of the accident caused by rash and negligent driving of
Truck No.DIL-5955. Although the Tribunal allowed the claim petition in
part, it absolved respondent No.2 Insurance Company by dismissing the           D
claim petition against the said respondent. The Tribunal awarded a sum
of Rs.25,000/- to opposite party No.3 Shiv Rani and Rs.1,75,000/- to
claimant Nos.1 to 6, with interest at the rate of 12% per annum from the
date of petition till the date of payment. In other words, the claim petition
was partly allowed against respondent No.1 - the owner of the offending
vehicle DIL-5955.                                                               E

       4. In the appeal preferred by the appellants/claimants against the
said decision, the only question urged before the High Court was about
the correctness of the view taken by the Tribunal in absolving the
respondent No.2 Insurance Company even though the offending Truck
No.DIL-5955 was duly insured by the said Insurance Company. The                 F
High Court affirmed the view taken by the Tribunal that there was no
pleading or any evidence adduced by the owner of the offending Truck
to substantiate the fact that the Truck was driven by one Joginder Singh,
whose driving licence was produced on record. The High Court also
noted that there could be no presumption that Joginder Singh was driving        G
the offending vehicle. The appellants have assailed the aforesaid view
taken by the Tribunal and affirmed by the High Court.
      5. According to the appellants, the Insurance Company did not
produce any evidence before the Tribunal. As a result, it was not open to
the respondent No.2 Insurance Company to extricate itself from the              H
198              SUPREME COURT REPORTS                           [2018] 1 S.C.R.


A     liability, having duly insured the offending vehicle DIL-5955, which fact
      has been substantiated by production of the Insurance Policy. A defence
      being available to the Insurance Company, that the offending vehicle
      was not driven by an authorised person and/or person not having a valid
      driving licence, it was obligatory on the part of the Insurance Company
      to substantiate that defence and more so, to rebut the plea taken by the
B
      owner of the offending vehicle that the offending vehicle was being
      driven by an authorised person having a valid driving licence. To buttress
      this argument, reliance has been placed on the decision of this Court in
      the case of National Insurance Co. Ltd. Vs. Swarn Singh and Ors.1
             6. We have heard Mr. Sharve Singh, learned counsel appearing
C     for the appellants and Mr. Rishi Malhotra, learned counsel appearing for
      the Insurance Company.
             7. In the context of the issue that arises for our consideration, we
      may first advert to the claim petition. In the claim petition, the name of
      the driver of the offending vehicle DIL-5955 has not been mentioned.
D     The assertion made in the claim petition is that Truck No.URS-2735
      driven by Om Prakash was knocked down by the offending Truck
      No.DIL-5955 coming from the opposite direction by rash and negligent
      driving. The reply filed by respondent No.1 – owner of the offending
      Truck DIL-5955 also does not mention the name of the driver of the
E     offending Truck No.DIL-5955. Indeed, the reply filed by respondent
      No.1 asserts that the vehicle No.DIL-5955 was comprehensively insured
      by the respondent No.2 Insurance Company for unlimited liability. The
      details of the Insurance Certificate have been mentioned in the Written
      Statement. In paragraph 18 of the Written Statement, however, a vague
      assertion has been made that on the alleged date of incident, the offending
F     vehicle DIL-5955 was plied by an authorised person having a valid driving
      permit.
            8. In the Written Statement filed by the respondent No.2 Insurance
      Company to oppose the claim petition, it is asserted that the claimants
      should be put to strict proof about the occurrence of the accident and
G     other related matters. It is then asserted that no insurance is directly
      issued by the Head Office of respondent No.2. The name of the Branch
      Office by which the vehicle in question was allegedly insured has not
      been disclosed and in its absence, it was difficult to trace out the insurance
      policy. Further, the original insurance policy will have to be summoned
      1
H         (2004) 3 SCC 297
                PAPPU v. VINOD KUMAR LAMBA                                     199
                    [A. M. KHANWILKAR, J.]

from the Insurer or owner of the vehicle. It is then asserted that neither     A
has the alleged owner of the vehicle (respondent No.1) informed about
any claim nor have the claimants made any claim to the Insurance
Company. As regards the plea taken by respondent No.1 - owner of the
offending vehicle, in paragraph 29 of the Written Statement, it has been
asserted by respondent No.2 as follows:
                                                                               B
      “29. That in petition anywhere or in column 16 of the petition
      details or driving licence of the alleged driver are not given and in
      absence of details it is quite impossible for answering opposite
      party to ascertain the driving licence and its validity on the alleged
      date of accident, hence the driving licence if any and its validity
      on the alleged date of accident is denied. The answering opposite        C
      party could not be held liable for payment of any award if made,
      unless it is proved that the vehicle allegedly involved in the alleged
      accident was driving under valid driving licence by its authorized
      driver with due permission and under control of its owner and
      under valid road, permit, fitness, road tax etc. as required under       D
      the provisions of M.V. Act and also was driven with full compliance
      of the terms and conditions of the alleged insurance policy.”
      It is not necessary to reproduce the other averments in the Written
Statement filed by respondent No.2.
       9. On the basis of these pleadings, the matter proceeded before         E
the Tribunal. Admittedly, the respondent No.1 - owner of the vehicle did
not produce any evidence in support of his plea taken in the Written
Statement that the offending vehicle was plied by an authorised person
having a valid driving permit. All that respondent No.1 did was to produce
a driving licence purportedly of one Joginder Singh. The Tribunal              F
adverted to the said driving licence but found that nowhere the owner of
the vehicle has asserted that the Truck No.DIL-5955 was in fact driven
by said Joginder Singh at the time of the accident. On the basis of the
pleadings, the Tribunal framed issue No.3 and answered the same in
favour of the Insurance Company as follows:
                                                                               G
      “Issue No.3: Whether the Truck No. DIL-5955 was not being
      driven by a person having valid and effective driving licence?
               As it has been stated earlier, that the owner of Truck
      No. DIL-5955 has filed original driving licence of one Joginder
      Singh but he has not mentioned anywhere that Joginder Singh
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200            SUPREME COURT REPORTS                          [2018] 1 S.C.R.


A           was driving his truck at the time of accident. The owner has filed
            photo copy of insurance policy in which at paragraph 5 proviso A,
            it is written that the insurance company will be liable when driver
            was holding a valid and effective driving licence. The owner of
            the vehicle has not proved that his driver was holding a valid and
            effective driving licence. This issue is decided in the negative.”
B
            10. This view taken by the Tribunal was assailed before the High
      Court by the claimants. No other contention was raised before the High
      Court except about the liability of the Insurance Company. The High
      Court, after analysing the record, negatived the said contention in the
      following words:
C           “5. The only question which has been raised before this Court is,
            whether Insurance Company has rightly been held not liable by
            holding that Truck No. DIL 5955 was not being driven by a person
            having valid licence. This Court has to consider, whether findings
            recorded in respect of issue no.3 is correct or not.
D           6. Learned counsel for the appellants could not dispute that neither
            any pleadings nor evidence have been led before Tribunal to
            suggest or to tell, as a matter of fact, that aforesaid truck was
            being driven by Sri Joginder Singh. It is not in dispute that owner
            of aforesaid vehicle produced driving licence which was in the
E           name of Sri Joginder Singh but at no stage it is pleaded or brought
            on record before Tribunal that Sri Joginder Singh was the person
            who was driving aforesaid Truck. This fact has been noticed by
            Tribunal in the impugned order as under.
            ‘Joginder Singh Ko Prastut Kiya Gaya Hai Parantu Joginder Singh
            Truck No. 5955 Ka Chalak Tha Yah Kahi Par Bhi Nahi Kaha
F           Gaya Hai.’
            7. Learned counsel for the appellants could not dispute this fact.
            In view of above statement of fact that it was not pleaded or
            proved before Tribunal, the mere production of driving licence of
            Sri Joginder Singh, by owner of vehicle, cannot raise a presumption
G           that he was a person who was driving vehicle. The findings
            recorded by Tribunal, therefore, cannot be faulted in any manner.
            No other argument has been advanced.”
            11. The question is: whether the fact that the offending vehicle
      bearing No.DIL-5955 was duly insured by respondent No.2 Insurance
H     Company would per se make the Insurance Company liable? This Court
                PAPPU v. VINOD KUMAR LAMBA                                     201
                    [A. M. KHANWILKAR, J.]

in the case of National Insurance Co. Ltd. (supra), has noticed the            A
defences available to the Insurance Company under Section 149(2)(a)(ii)
of the Motor Vehicles Act, 1988. The Insurance Company is entitled to
take a defence that the offending vehicle was driven by an unauthorised
person or the person driving the vehicle did not have a valid driving
licence. The onus would shift on the Insurance Company only after the
                                                                               B
owner of the offending vehicle pleads and proves the basic facts within
his knowledge that the driver of the offending vehicle was authorised by
him to drive the vehicle and was having a valid driving licence at the
relevant time. In the present case, the respondent No.1 owner of the
offending vehicle merely raised a vague plea in the Written Statement
that the offending vehicle DIL-5955 was being driven by a person having        C
valid driving licence. He did not disclose the name of the driver and his
other details. Besides, the respondent No.1 did not enter the witness box
or examine any witness in support of this plea. The respondent No.2
Insurance Company in the Written Statement has plainly refuted that
plea and also asserted that the offending vehicle was not driven by an
                                                                               D
authorised person and having valid driving licence. The respondent No.1
owner of the offending vehicle did not produce any evidence except a
driving licence of one Joginder Singh, without any specific stand taken in
the pleadings or in the evidence that the same Joginder Singh was, in
fact, authorised to drive the vehicle in question at the relevant time. Only
then would onus shift, requiring the respondent No.2 Insurance Company         E
to rebut such evidence and to produce other evidence to substantiate its
defence. Merely producing a valid insurance certificate in respect of the
offending Truck was not enough for the respondent No.1 to make the
Insurance Company liable to discharge his liability arising from rash and
negligent driving by the driver of his vehicle. The Insurance Company
                                                                               F
can be fastened with the liability on the basis of a valid insurance policy
only after the basic facts are pleaded and established by the owner of
the offending vehicle - that the vehicle was not only duly insured but
also that it was driven by an authorised person having a valid driving
licence. Without disclosing the name of the driver in the Written Statement
or producing any evidence to substantiate the fact that the copy of the        G
driving licence produced in support was of a person who, in fact, was
authorised to drive the offending vehicle at the relevant time, the owner
of the vehicle cannot be said to have extricated himself from his liability.
The Insurance Company would become liable only after such foundational
facts are pleaded and proved by the owner of the offending vehicle.
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202             SUPREME COURT REPORTS                           [2018] 1 S.C.R.


A           12. In the present case, the Tribunal has accepted the claim of the
      appellants. It has, however, absolved the respondent No.2 Insurance
      Company from any liability for just reasons. The High Court has also
      affirmed that view. It rightly held that there can be no presumption that
      Joginder Singh was driving the offending vehicle at the relevant time.
B           13. Be that as it may, no grievance about the quantum of
      compensation awarded by the Tribunal has been made by the appellants
      – claimants (either before the High Court or before us in this appeal).
      Hence, that issue does not warrant any scrutiny. Similarly, the owner of
      the vehicle (respondent No.1) has not challenged the findings of the
      Tribunal as affirmed by the High Court in favour of the insurer (respondent
C     No.2), including on the factum that the vehicle was driven by a person
      who did not have a valid driving licence at the relevant time.
             14. The next question is: whether in the fact situation of this case
      the insurance company can be and ought to be directed to pay the claim
      amount, with liberty to recover the same from the owner of the vehicle
D     (respondent No.1)? This issue has been answered in the case of National
      Insurance Company Ltd. (supra). In that case, it was contended by the
      insurance company that once the defence taken by the insurer is accepted
      by the Tribunal, it is bound to discharge the insurer and fix the liability
      only on the owner and/or the driver of the vehicle. However, this Court
E     held that even if the insurer succeeds in establishing its defence, the
      Tribunal or the Court can direct the insurance company to pay the award
      amount to the claimant(s) and, in turn, recover the same from the owner
      of the vehicle. The three-Judge Bench, after analysing the earlier decisions
      on the point, held that there was no reason to deviate from the said well-
      settled principle. In paragraph 107, the Court then observed thus:
F
            “We may, however, hasten to add that the Tribunal and the court
            must, however, exercise their jurisdiction to issue such a direction
            upon consideration of the facts and circumstances of each case
            and in the event such a direction has been issued, despite arriving
            at a finding of fact to the effect that the insurer has been able to
G           establish that the insured has committed a breach of contract of
            insurance as envisaged under sub-clause (ii) of clause (a) of sub-
            section (2) of Section 149 of the Act, the insurance company shall
            be entitled to realize the awarded amount from the owner or driver
            of the vehicle, as the case may be, in execution of the same award
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          PAPPU v. VINOD KUMAR LAMBA                                        203
              [A. M. KHANWILKAR, J.]

having regard to the provisions of Sections 165 and 168 of the              A
Act. However, in the event, having regard to the limited scope of
inquiry in the proceedings before the Tribunal it has not been able
to do so, the insurance company may initiate a separate action
therefor against the owner or the driver of the vehicle or both, as
the case may be. Those exceptional cases may arise when the
                                                                            B
evidence becomes available to or comes to the notice of the insurer
at a subsequent stage or for one reason or the other, the insurer
was not given an opportunity to defend at all. Such a course of
action may also be resorted to when a fraud or collusion between
the victim and the owner of the vehicle is detected or comes to
the knowledge of the insurer at a later stage.”                             C
Further, in paragraph No.110, the Court observed thus:
110. The summary of our findings to the various issues as raised
in these petitions are as follows:
(i) Chapter XI of the Motor Vehicles Act, 1988 providing                    D
compulsory insurance of vehicles against third party risks is a
social welfare legislation to extend relief by compensation to victims
of accidents caused by use of motor vehicles. The provisions of
compulsory insurance coverage of all vehicles are with this
paramount object and the provisions of the Act have to be so
interpreted as to effectuate the said object.                               E

(ii) Insurer is entitled to raise a defence in a claim petition filed
under Section 163A or Section 166 of the Motor Vehicles Act,
1988 inter alia in terms of Section 149(2)(a)(ii) of the said Act.
(iii) The breach of policy condition, e.g. disqualification of driver       F
or invalid driving licence of the driver, as contained in Sub-section
(2)(a)(ii) of Section 149, have to be proved to have been committed
by the insured for avoiding liability by the insurer. Mere absence,
fake or invalid driving licence or disqualification of the driver for
driving at the relevant time, are not in themselves defences
available to the insurer against either the insured or the third parties.   G
To avoid its liability towards insured, the insurer has to prove that
the insured was guilty of negligence and failed to exercise
reasonable care in the matter of fulfilling the condition of the policy
regarding use of vehicles by duly licensed driver or one who was
not disqualified to drive at the relevant time,
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204       SUPREME COURT REPORTS                            [2018] 1 S.C.R.


A     (iv) The insurance companies are, however, with a view to avoid
      their liability must not only establish the available defence(s) raised
      in the said proceedings but must also establish ‘breach’ on the
      part of the owner of the vehicle; the burden of proof where for
      would be on them.
B     (v) The court cannot lay down any criteria as to how said burden
      would be discharged, inasmuch as the same would depend upon
      the facts and circumstance of each case.
      (vi) Even where the insurer is able to prove breach on the part of
      the insured concerning the policy condition regarding holding of a
C     valid licence by the driver or his qualification to drive during the
      relevant period, the insurer would not be allowed to avoid its liability
      towards insured unless the said breach or breaches on the condition
      of driving licence is/ are so fundamental as are found to have
      contributed to the cause of the accident. The Tribunals in
      interpreting the policy conditions would apply “the rule of main
D     purpose” and the concept of “fundamental breach” to allow
      defences available to the insured under Section 149(2) of the Act.
      (vii) The question as to whether the owner has taken reasonable
      care to find out as to whether the driving licence produced by the
      driver, (a fake one or otherwise), does not fulfil the requirements
E     of law or not will have to be determined in each case.
      (viii)     xxx
      (ix)       xxx
      (x) Where on adjudication of the claim under the Act the
F     tribunal arrives at a conclusion that the insurer has
      satisfactorily proved its defence in accordance with the
      provisions of Section 149(2) read with Sub-section (7), as
      interpreted by this Court above, the Tribunal can direct
      that the insurer is liable to be reimbursed by the insured
      for the compensation and other amounts which it has been
G
      compelled to pay to the third party under the award of the
      tribunal Such determination of claim by the Tribunal will be
      enforceable and the money found due to the insurer from
      the insured will be recoverable on a certificate issued by
      the tribunal to the Collector in the same manner under
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                PAPPU v. VINOD KUMAR LAMBA                                        205
                    [A. M. KHANWILKAR, J.]

        Section 174 of the Act as arrears of land revenue. The                    A
        certificate will be issued for the recovery as arrears of land
        revenue only if, as required by Sub-section (3) of Section
        168 of the Act the insured fails to deposit the amount
        awarded in favour of the insurer within thirty days from the
        date of announcement of the award by the tribunal.
                                                                                  B
        (xi) The provisions contained in Sub-section (4) with proviso
        thereunder and Sub-section (5) which are intended to cover
        specified contingencies mentioned therein to enable the
        insurer to recover amount paid under the contract of
        insurance on behalf of the insured can be taken recourse
        of by the Tribunal and be extended to claims and defences                 C
        of insurer against insured by, relegating them to the remedy
        before, regular court in cases where on given facts and
        circumstances adjudication of their claims inter se might
        delay the adjudication of the claims of the victims.”
                                                       (emphasis supplied)        D

       15. In the present case, the owner of the vehicle (respondent
No.1) had produced the insurance certificate indicating that vehicle No.
DIL- 5955 was comprehensively insured by the respondent No.2
(Insurance Company) for unlimited liability. Applying the dictum in the
case of National Insurance Company Ltd. (supra), to subserve the ends             E
of justice, the insurer (respondent No.2) shall pay the claim amount
awarded by the Tribunal to the appellants in the first instance, with liberty
to recover the same from the owner of the vehicle (respondent No.1) in
accordance with law.
       16. Accordingly, the appeal is allowed to the extent that the              F
compensation amount awarded by the Tribunal and confirmed by the
High Court shall be paid and satisfied by the insurer (respondent No.2)
in the first instance, with liberty to recover the same from the owner of
the vehicle (respondent No.1) in accordance with law.
      17. Appeal is disposed of in the aforementioned terms with no               G
order as to costs.


Nidhi Jain                                                  Appeal disposed of.

                                                                                  H